Retailers Look for Flexible New Leases from Landlords

"This is an effect of the pandemic that is going to last."

"This is an effect of the pandemic that is going to last."

Written by R. Ashton Rowles
Published on August 26, 2020

With retail rents 25% less expensive now than before the pandemic in some areas, and some property owners foreseeing years of profitlessness ahead, retail landlords are now creating leases that provide specific language covering pandemics, required insurance policies, and simplified agreements to ensure everyone understands how another such event would be handled and who would pay for what. One landlord has offered to reduce minimum base rent to 50% if another shutdown was mandated in his city, and has begun discussing leases structured on percentage of retail sales. 

Will other retailers follow suit and find more flexible arrangements for their tenants? If the pandemic continues on for months and months, will these new agreements still provide an equitable situation for everyone? And how will retailers adjust to sharing their profits once the pandemic has subsided?

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